• Legal Intro
• Practical Considerations
• Pre-Purchase Considerations
• Deed of Trust
• Co-Habitation Agreement
• Conveyancing
• Wills
• Finding A Good Solicitor

Legal Intro
Our goal is to make your dreams of owning your own home / investment a reality. It is equally important to us that you do it armed with all the information you might need, with thought and with consideration for others that might be involved in the process.

Mention the law to most people and very quickly you'll find their concentration drifting away from you... hey come back! I promise this will not be heavy law, it will be just enough information to make sure that you are armed with the know-how to ask the right questions at the right time. It is so important that you do this because with the documents noted below you can be far more comfortable that your legal and financial rights are protected. Without them you may well be lucky enough to still have a perfectly happy and prosperous co-buyer relationship, but we would not be doing our job properly if we were not to point out how vitally important we feel it is for you to consider this essential and relatively inexpensive stage in your buying process. Think of it like car insurance, you may never need to claim, but if you do have a prang you'll be glad you had it sitting there protecting you.

The time to start looking for a good solicitor is NOW. "But I don't have a property to buy yet" I hear you cry. When you find the property of your dreams there are two things you will need immediately to prove how serious you are about buying. They are a mortgage 'In Principle' (see the Financial Essentials page) and your solicitor's contact details. This will win you brownie points that could help you with negotiations or put you in a better position than someone who offers the same amount of money, but does not have these details ready yet. To find a solicitor you could look at our Finding A Good Solicitor section or contact DCUK the online conveyancing experts.

Practical Consideration
When thinking about buying a property with someone else, whether to live in or as an investment, before you even consider the legal side of things it is important that you employ a 'clear as day' policy from the off. Put simply this just means, be up front with one another, discuss in detail what you are looking to gain from the co-buyer relationship, how long you are looking to own the property for, what your hopes are for the future (whether you're expecting to buy you're own place, rent out your room, travel for an extended period of time, move your partner in with you, etc).

If you do this right from the start there will be fewer surprises down the track and you'll ensure yourself a far more fruitful relationship. Find some time to sit down and have a coffee or over a beer discuss all these issues so you are sure as sure can be that you have the same or at least similar property aspirations and goals.

Pre-Purchase Considerations
The subject of 'money' is an emotional one for many people, so to avoid any misunderstandings it is best to enter into your shared ownership relationship with a plan of action. As soon as you start looking for a property you are likely to incur costs. Time off work, travel expenses, somewhere to stay if you're travelling a distance to look. What starts off as small amounts grows over time. When you find a property that you like you may incur legal fees, mortgage arrangement fees, survey costs, and more. Who pays for these? What arrangements will you have for paying one another back. As I said money is an emotional subject and it does not matter whether your co-buyers are friends, family or someone you've met through SharedSpaces you need to have a plan as to how to deal with the money.

You could get your solicitor to draw up a contract for you, but quite frankly you could also draw something up between yourselves to save money and time. The document needs to contain; your names, how the expenses are to be split, when outstanding monies are to be repaid to one another, it should be dated and signed by everyone, then you all take a copy. It is of course always advisable to consult your solicitor when entering into an agreement, even if it is just for them to check out what you've drafted before you sign the agreement.

An agreement such as this requires you to discuss the money situation and consider everyone's perspectives, thus reducing the likelihood of misunderstandings and money outstandings that can lead to bad blood before you've even got started.

Deed of Trust
If there's one document that you should absolutely positively have when co-buying it's a Deed of Trust (also known as a Trust Deed or a Declaration of Trust). This can be a simple document drawn up between co-buyers and their solicitor(s), costing no more than a couple of hundred pounds, or it can be as costly and complex as you wish it to be. This is the document that is created between you and signed at Exchange of contracts when buying a property that sets out each of your legal rights over the property (what percentage of its value you each own), how the major costs of ownership are to be split and how the co-buyer relationship will end.

Knowing what percentage of the property's value you own and having this protected in law is important. There is no rule that says two people who decide to buy together have to contribute an even amount to the purchase or upkeep of the home. If you contribute 75% of the money and your co-buyer pays the other 25% who records this fact so when you sell you are guaranteed to get the correct percentage back? Not the mortgage lender, as they only note that you both own the property jointly. Not the Land Registry, as they are just interested in your names to register total ownership. It's actually up to you to do this, and the Deed of Trust states the exact percentage of value of the property that you both legally own.

The major costs of ownership can be anything from the percentage of the total mortgage you are each responsible for paying to repair bills on the property or periodic maintenance. Running a property is a costly business, and if you find a year down the track that you need a new roof who will pay for it? Will things be split 50/50 because you both live in the property and gain the benefit from it, or will it be split 75/25 like the ownership? There is no right or wrong answer here, only negotiation with one another to decide right from the beginning how you are going to handle situations like this so that you are both comfortable with them.

Co-buyer relationships have a natural time limit. To stereotype a typical co-buyer, he or she would be in their 20's and 30's, in their first or second jobs and single (of course there are many people out there looking for a co-buyer through SharedSpaces who do not fit this mould, but I'm generalising here). After a few years have gone by it is natural to assume that many co-buyers will either find that their salaries will have gone up to a level where they can now afford their first solo property or they may have started to think seriously of settling down with their partner. Many people considering co-buying set a legal time limit on the relationship by including it in the Deed of Trust. It could be any number of years you decide upon between you, but having a finite end to the relationship once again means that you are planning your relationship rather than winging it and dealing with the surprises as they occur.

One of the most important factors in drawing up a Deed of Trust is in the thought process that goes into it's creation. If you have been lucky enough to find a decent solicitor they will take the time to make you consider every important aspect of your relationship with your co-buyer partner, including what happens when you decide to sell. This will once again tune you into one another's thoughts so you are as sure as you can be that you are following the same path and have the same aspirations and dreams for the property you are considering buying together.

Co-Habitation Agreement
This is more of a mission statement than a legal document. It is an agreement on how to live harmoniously with others. This is more about mutual respect than anything else. Who will take out the garbage, who will do the dishes, how the bills will be split, etc. Much like everything so far discussed in this section it's all about drawing up a plan so surprises do not cause friction later on. Basically it's something you'd draw up and pin to the fridge. We're not suggesting a rigid set of rules, more guidelines to follow to ensure a friction free co-owner existence.

Conveyancing
So you've found your dream home, and hopefully by this point you've already decided on a solicitor to use. Conveyancing is the term for all the legal elements of the purchase process. This breaks down into:

• Instructing your solicitor
• Searches
• Land Registry
• Contract negotiation
• Exchange & completion

Instructing Your Solicitor
Solicitors come in many shapes and sizes, they work long hours and have many clients. I'm stating the obvious here I know, but it's important that you appreciate they may be 'professionals' but they suffer from the same time management issues as the rest of us, and picking one that can manage their workload efficiently is essential. Select a solicitor that you feel comfortable with, someone that you are sure will be both efficient and realistic in their targets. Once you have started the purchase process ball rolling it is your solicitor that will make or break the deal. If they are too slow then the seller may worry that you are not serious, too quick and you might worry about the thoroughness of the job they are doing for you unless they convince you otherwise.

Solicitors generally charge by the hour but for conveyancing they should give you a fixed fee (this fee will usually be based on a predictable amount of time spent on your case with a provision in the small print for charging you extra if things get more complicated. Check the small print. They can charge anything from £400 upwards (fees are usually based on the value of the property and whether you are buying a Freehold or Leasehold property) for their services and remember that there will be VAT to add on to this.

More and more people these days use on-line conveyancing firms. You need not ever meet your solicitor. Simply provide them with all the details they require through their website or over the phone, give your estate agent their contact details and you're away. To generalise, web based organisations are far more likely to use modern technologies to keep you updated with your purchase. They may have case tracking software on their site, stay in touch with you via email or text messaging, and could well be more used to volume work than traditional firms. If you would like to build a better relationship with your solicitor nothing does this better than meeting with them face to face, and for this you will need to go to a traditional firm.

Searches

• Local Authority Search: This finds out what the local authority knows about the property you are looking to buy. It asks questions such as; does the council maintain the road the property is accessed by? and has planning permission ever been asked for or granted on the property for any reason?
• Water & Drainage Search: This checks whether the property is connected to the public water supply and how the property is billed (rated or metered). Also whether the property is connected to the public sewage network or has other private provisions. It also checks whether the property is close to or effected by its vicinity to public water or sewage facilities or supply.
• Environmental Search: Are there any environmental factors that affect the property? Was it built on or near a landfill? Is there any risk of contaminated land, flooding or toxic emissions? To name just a few.

Fees for these searches vary by region as they are decided on by the local councils that are producing them for your solicitor. Solicitors can also determine the price they charge you and some charge a premium for packaging all three searches together, so beware of these tactics.

Land Registration
This is the central record of land and property ownership. Your solicitor is required to inform the Land Registry of your purchase so the title of the land can be put in your name(s). There is a fee for this that your solicitor will detail for you.

Contract Negotiation
This is the bit that the customer has least understanding or sight of, but is the part that requires the most legal skill. Negotiating the size of deposit (10% is normal so 5% will need to be negotiated into the agreement), negotiating all the terms of the exchange documents and the dates of exchange and completion. These negotiations need a good deal of professional tact.

Exchange & Completion
An Exchange of contracts is when you both buyer and seller have signed their contractual agreements to purchase the property on a specified date and both sides solicitors have confirmed that this has been done. After this point you are legally obliged to buy the property, so if you back out now there will be financial penalties to pay. Exchange is also when you have to pay the deposit money to your solicitor. To delay payment of your deposit until Completion you could take out an Exchange Bond. It's an insurance policy that you can take out that's underwritten by a regulated insurance company that guarantees your deposit to the seller. Quite a good idea if you expect there will be some time between Exchange & Completion, or you need the deposit money elsewhere in this time. A third option is if you are buying a property through a company like The First Time Buyer Group who reward you for buying through them by paying your deposit back to you at Completion. So with an Exchange Bond you wont have to pay it at all.

Completion is when you have actually paid for the property you're purchasing. On the date specified in the contracts at Exchange the buyer's solicitor arranges for a bank transfer to take place (although this can be at any time on that day it is normal for this to be done around lunchtime). Once the seller's solicitor has confirmed that the money has reached their account and all other legal i's are dotted and t's are crossed a Completion is said to have occurred, and as the buyer you now legally own the property and can collect the keys from the estate agent.

Wills
A Will is a legal document that states exactly who will inherit what from your estate when you die. If you've a favourite aunt who you would like to leave all your Dirty Dancing CD's to, or you'd like to leave your brother your car you'll have to write a Will to legally distribute these items in the event of your untimely departure from this world.

More important than CD's and the car is if you own a property, or co-own a property. Who should inherit your share in the property should be taken care of in the Deed of Trust, but if it is not, or you have decided to ignore our advice (please don't ignore our advice... well not this part anyway) you will need to include this in your Will.

Most solicitors can help you draw up your Will, there are even templates you can download from the internet, and it shouldn't cost much for a basic one. It's not brain surgery, all you need to do is to note everything you own or expect to own and split it between those you wish to have them one day. It needs to be dated, signed and that's pretty much it.

Finding A Good Solicitor
The Law Society is a good place to start if you're looking for a solicitor. They have a directory you can use to find a solicitor in your area.

Asking friends and family if they know a good solicitor is another way. Recommendation is the best way of finding anyone because you'll know they've done a good job for someone you trust so they are more likely to do a good job for you as well.

If you like you could even use our solicitor. Kaltons can help you with advice and services on any of the documents noted above (Deeds of Trust, Conveyancing, Wills and any other contract or agreement that you might want to have drawn up when buying a property as an investment or a homeowner, on your own or with someone else). Alternatively if it is just Conveyancing advice and assistance you are looking for you could contact DCUK who are specialists in this area and were recommended to us. One very important thing that separates them from many others is that they have a no Completion no fee policy that could save you £hundreds if your purchase falls through. We hope this never happens to you, but like anything else if you have this insurance as a back-up it gives a little more peace of mind.